How to handle pocket money

Step 1: What does your child do to earn the money?

Set up a series of chores and expectations. These should be measurable. For example, I expect your bed to be made everyday, wash the dishes once a week, and pack your ironed clothes in your cupboard every Sunday. Perhaps I also expect you to feed the animals daily and to maintain a C average at school.
All these are measurable. Deduct money for every chore not done and each expectation not met. This way, children learn to work for what they earn rather than just getting money for nothing. Out there in the real world the motto goes: “Nothing for nothing and very little for 10 cents”.

Step 2: Decide what you expect you child to be paying for.

This should include all social excursions, airtime for their telephone, luxury clothing purchases, birthday presents for friends and any special things they want. Also ensure it includes tuck shop money and sweet money (no more paying for sweets at the shop on the way home from work). Most parents say that alone saved them thousands.

Airtime:
Be conservative, remember there are social networks which cost very little like Mxit and facebook so communication should not be very expensive. A “please call me” can still be used if they want to speak to you.

Outings:
Remember don’t allow them to go to too many outing, no more than 1 per weekend and preferably ensure at least 1 weekend has a social outing that either does not cost money or forces them to stay home and enjoy some quality family time. Birthday presents for friends would fall in here.

Luxury Purchases:
These items should be saved for, rather give them less and get them to save for 2 or 3 months to buy that special shirt or fancy handbag. Buying what you want when you see it does not teach your child the value of money.

Tuck shop:
Tuck shop money should be for 1 day per week at most. Sandwiches and a fruit for school will be sufficient and you can add making it to their chore list and save yourself the time.

Sweets:
Be Smart, 1 sweet a week over and above tuck shop is more than enough. You don’t have to spoil your children, you may even find they would rather not have a sweet anyway if they have to pay for it themselves.

Example Budget:
Airtime per month: R 30.00
Social outings per month: R 200.00
Luxury purchases: R 100.00
Tuck shop money: R 40.00
Sweets: R 30.00
Saving(20%): R 100.00 (see previous post)
Total Pocket money: R 500.00

You need to calculate a budget before you decide on the amount you want to give them according to your means and their current lifestyle. You can only introduce this plan to your child once you are familiar and comfortable with it. If you have not decided, they will convince you they need more and you will end up paying it!